Store closures and weak demand for traditional office supplies and computers hurt Staples in the first quarter of fiscal 2014.
The company attributed a 44% drop in net earnings during the quarter to lower sales caused by store closures and a rise in the value of the dollar. But according to reports, the office products company and second largest internet retailer in the United States is facing stiff competition from big box retailers such as Walmart and e-commerce giants such as Amazon.
Net earnings were $96 million for the quarter. Net sales dropped 3% to $5.65 billion from $5.81 billion.
For the second quarter, the company anticipates further decreases in sales, which caused shares to drop 10%.
“We’re making progress meeting the changing needs of our customers as we reinvent Staples,” said chairman and CEO Ron Sargent. “Despite a slow start to the first quarter, our results were in line with our expectations and we expect to build momentum throughout 2014.”